Actionable Strategies for the Actionable Strategies for the Design of a High Performing Design of a High Performing

OrganizationOrganization

What is a “High Performing” What is a “High Performing” Organization/Credit Union?Organization/Credit Union?

Annually meets and typically, exceeds financial targets such as: growth, net income, ROA, etc.

Staff are satisfied and enjoy working at your CU – “willing to go the extra mile for the member” – “willing to try new things”

Members are satisfied and many members call you, to offer all their business

High Performance High Performance How do you get there?How do you get there?

1. Define Strategic Direction2. Compensate Staff Fairly3. Define Quality Service Standards4. Define Performance Contracts for all Staff5. Communicate6. Train Staff7. Coach Staff8. Introduce Multi-source Feedback9. Appraise and Reward Results10. Monitor Program Effectiveness

High Performance High Performance How do you get there?How do you get there?

1. Develop a Strategic Direction Make a commitment at the Board and management level to

expect “high performance” Know how much of your current membership do business

elsewhere and develop a plan that will ensure your staff gain that business

Ensure your products and your pricing are competitive Find out if your staff are satisfied - if not - take action Find our if your members are satisfied - if not - take action Know your CU’s current performance and set new targets Define how you will measure your CU’s achievement of the

new targets

High Performance High Performance How do you get there?How do you get there?

2. Compensate Staff Fairly Ensure you have internal equity – using job

evaluation and compensation management, pay fairly internally

External equity – know whom do you compete with for your business and your people, and set pay levels accordingly

Balance internal and external equity Staff who are not paid fairly will be less willing to

take on new duties, take risks, or support your organizational change

High PerformanceHigh PerformanceHow do you get there?How do you get there?

3. Define service quality standards

What is quality service to your CU? Define your version of quality service

Know how quality service is to be demonstrated by staff

Demand quality service from those serving your internal customers

High Performance High Performance How do you get there?How do you get there?

4. Develop performance contracts with all staff “Why does this job exist?” “What is it this job is to

accomplish?” “How will the performance of this job support our organizational direction?’

For each job, define not only “what” is expected but, “how” the job is to be done and what is considered successful performance

Use performance contracts as a foundation for coaching all staff to be the best they can be

Ensure contracts are realistic, measurable and attainable Ensure staff have the “span of control” they need to achieve

their goals

High Performance High Performance How do you get there?How do you get there?

5. Communicate Ensure staff understand “why” you are

implementing these new programs Ensure staff understand both the “big picture” and

their own role in that picture Adopt a discipline for continuous, consistent, open

communication - regular staff meetings, sales meetings, etc.

High PerformanceHigh PerformanceHow do you get there?How do you get there?

6. Train Staff Train staff to understand how to build long-term

relationships with their members Provide technical training – lending,

investments, etc. Train Management to be effective coaches Support any other training need that arises

High Performance High Performance How do you get there?How do you get there?

7. Coach Staff (Steps one to five are pointless unless you are going to require managers to act as coaches)

The manager’s customer is their employee Managers must hold their staff accountable for their

performance contracts Managers must demonstrate support by being accessible

and listening to obstacles raised by staff and deal with these obstacles

Give feedback informally all the time, recognize accomplishments and when necessary re-direct performance - document progress

High PerformanceHigh PerformanceHow do you get there?How do you get there?

8. Introduce Multi-source Feedback Must ensure accountability at all levels Management, member, peer,

High Performance High Performance How do you get there?How do you get there?

9. Appraise Performance and Reward Results Summarize the discussions with staff regarding

performance throughout the year Rate the staff’s demonstration of their

performance contract Reward contribution – bonuses, spot rewards,

etc. Design reward program to support your culture

Incentive PayIncentive Pay

Why are incentive pay programs used?

communicate credit union's strategic plan drive employee's achievement towards credit union's strategic

plan - shapes employee behaviour make amount of rewards more motivating supports employee involvement and communication encourages employee "ownership" of the organization's success more competitive pay programs

Incentive PayIncentive Pay

Individual Performance

Individual incentives Lump-sum bonuses Spot rewards Commission based

pay

Group Performance

Profit-sharing Gain-sharing

Incentive PayIncentive Pay

Group Performance - For example what is Gain-sharing?– Workers share a percentage of the value of increased productivity,

calculated under a prearranged formula. What are the characteristics?

– Based on financial measures/business goals from strategic plan– originated in the manufacturing industry - now found in all

industries– emphasizes and enhances small group teamwork– employees learn more about the "business"– defined term– fully funded reward

Incentive PayIncentive Pay

Group Performance - For example what is Profit Sharing?– Broad group of employees share a pool created by a share of

profits, usually under a prearranged formula. What are the characteristics?

– "line of sight" is typically indirect for some employees– oldest type of group incentive– tied to organization's strategic plan– emphasizes and enhances organizational teamwork– employees learn more about the "business"– defined term– funded reward

Incentive PayIncentive Pay

Individual Performance - For example what are Individual Incentives or lump-sum increases?– individualized to apply to individual contributors.

What are the characteristics?– based on individual efforts– tied indirectly to organization's strategic plan– does not emphasize or enhance teamwork– depends heavily on effective performance management programs– defined term– not funded directly

Incentive PayIncentive Pay

Individual Performance - For example what are Spot Rewards?– One-time plans to reward a limited number of key players

for successful completion of a project, program or product.

What are the characteristics?– not necessarily cash– improve morale– can make work more "fun"– motivate employees to meet a goal– very short life-span

Incentive PayIncentive Pay

Individual Performance - For example what is Commission Based Pay?– Pay directly based on the achievement of a goal - typically

used to compensate "sales" type jobs. What are the characteristics?

– can be given instead of, or with salary– high director of behaviour– high motivator– simple to understand– funded reward– does not support teamwork

Incentive PayIncentive Pay

Reasons alternative reward programs fail...– inappropriate measurements - either too high or too low– measurements not aligned with strategic plan– too complex for management or employees to understand– overpayment or underpayment– double payment or conflict with base pay– organization is poor at employee communication– organization is poor at performance management– not designed for the organization's level of "readiness"

Incentive PayIncentive Pay

Organizational conditions for successful variable pay programs...

clear and well understood vision and strategic plan effective management/leadership effective employee communication effective performance management high emphasis on rewards and recognition clearly defined roles employees are empowered strong commitment to teamwork

High Performance High Performance How do you get there?How do you get there?

10. Monitor Program Effectiveness Did you achieve your Cu’s financial goals? Did your managers/staff reach their goals? Are your staff satisfied? Are your members satisfied? If not, what are you going to do about it next

year?